Interest computed on principal alone, and not on principal plus interest.
Interest computed only on the original principal and not on the sum of the principal plus accrued interest. The amount of simple interest remains constant.
Interest that is paid only on the original principal or on the amount originally borrowed. Interest earned or interest charges are not included in future calculations. Because of this, the amount of interest earned, or owed, in the case of a loan, will be less than with a calculation that uses compound interest. See also compound interest.